Eminent domain is a term that keeps coming up in the news but what does it mean? The power of eminent domain is the taking of private property by public entities, without the consent of the landowner. The process of eminent domain is called condemnation. Public entities include the city, county, state or federal government as well as private companies. These entities are referred to as condemning authorities.
What does this term mean to you? Yes, the condemning authorities can take your land, but the landowner is entitled to just or adequate compensation for the land. The Texas Property Code defines adequate compensation in terms of “market value”. Market value is further defined in court cases as the price that a willing buyer would pay to a willing seller. The market value is not limited to the current use of the property. Texas law allows the landowner to recover for the highest and best use to which the property can reasonably be adapted. Is the entire parcel of land being taken or only a portion? When a partial taking occurs, the valuation of the land is based on 1) the value of the condemned portion, 2) the damage to the remaining land, and 3) the benefit to the remaining land.
How does condemnation work? The condemnation process is confusing. The nuances of the process favor the condemning authority. The landowner must be wary at each phase of the process to fully protect their rights. Here is an overview of the condemnation process:
1. The condemning authority makes a “bona fide” offer to purchase the property. The condemning authority will approach the landowner with an offer. They will want to survey the property. This is a negotiation. Just because the condemning authority has the ability to take your property doe not mean you have to accept their first offer. The condemning authority should provide an appraisal to back up their bona fide offer. Keep in mind that the appraisal is prepared by an appraiser paid by the condemning authority to substantiate the amount that the condemning authority wants to pay.
2. When the condemning authority’s offer is rejected, they begin the formal condemnation process by filing a petition in either the county court or the district court. The judge will appoint three disinterested landowners in the county to serve as special commissioners. The special commissioners are sworn to assess damages fairly and impartially. The special commissioners set a time and place for the hearing. Each party is entitled to at least ten days’ notice of the hearing. This hearing is to determine the market value and any damages. Both parties put on evidence through appraisers and witnesses to support their valuation of the land. The special commissioners document their decision in writing and file it with the court.
3. Either party may object to the award by filing written objections with the court. There is a timeline for these objections. The parties may continue to negotiate and come to a settlement or the case may proceed to a judge or a jury trial. The condemning authority may take possession of the land after the special commissioners file their award, even if the award is being appealed.
Do not forget that the condemning authority is a business tasked with a project. Acquiring the land needed for the project is a vital step. The quicker the condemning authority can acquire the land, the quicker they can begin construction on their project. The landowner can and should negotiate to receive fair market value for their land.
Once there is an agreement between the landowner and the condemning authority, the landowner must sign an easement. This easement is drafted in favor of the condemning authority. Much like any deed or real property document, the easement must be read carefully to ensure that the landowner’s rights and remaining property are protected. A landowner does not have to go through this process alone. Discuss this with your family, friends, neighbors, and seek counsel. Landowners have rights but they must exercise them.